31 December 2008

At the request of the Federal Trade Commission, a U.S. district court has issued a temporary halt to a massive “scareware” scheme, which falsely claimed that scans had detected viruses, spyware, and illegal pornography on consumers’ computers. According to the FTC, the scheme has tricked more than one million consumers into buying computer security products such as WinFixer, WinAntivirus, DriveCleaner, ErrorSafe, and XP Antivirus. The court also froze the assets of those responsible for the scheme, to preserve the possibility of providing consumers with monetary redress.

According to the FTC’s complaint, the defendants used an elaborate ruse that duped Internet advertising networks and popular Web sites into carrying their advertisements. The defendants falsely claimed that they were placing Internet advertisements on behalf of legitimate companies and organizations. But due to hidden programming code that the defendants inserted into the advertisements, consumers who visited Web sites where these ads were placed did not receive them. Instead, consumers received exploitive advertisements that took them to one of the defendants’ Web sites. These sites would then claim to scan the consumers’ computers for security and privacy issues. The “scans” would find a host of purported problems with the consumers’ computers and urge them to buy the defendants’ computer security products for $39.95 or more. However, the scans were entirely false.

According to the complaint, the two companies charged in the case – Innovative Marketing, Inc. and ByteHosting Internet Services, LLC – operate using a variety of aliases and maintain offices in various countries. Innovative Marketing is a company incorporated in Belize that maintains offices in Kiev, Ukraine. ByteHosting Internet Services is based in Cincinnati, Ohio.

The complaint alleges that these two companies, along with individuals Daniel Sundin, Sam Jain, Marc D’Souza, Kristy Ross, and James Reno, violated the FTC Act by misrepresenting that they conducted scans of consumers’ computers and detected a variety of security or privacy issues, including viruses, spyware, system errors, and pornography. The complaint also names a sixth individual, Maurice D’Souza, as a relief defendant who received proceeds from the scheme.

On December 2, 2008 the FTC requested and received a temporary restraining order from the U.S. District Court for the District of Maryland. Under its terms, the defendants are barred from falsely representing that they have run any type of computer analysis, or that they have detected security or privacy problems on a consumer’s computer. They also are barred from using domain names obtained with false or incomplete information, placing advertisements purportedly on behalf of a third party without that party’s consent, or otherwise attempting to conceal their own identities. The order also mandates that companies hosting the defendants’ Web sites and providing domain-registration services take the necessary steps to keep consumers from accessing these Web sites.

The FTC seeks to permanently bar the defendants from engaging in “scareware” marketing. The FTC also asks the court to order the defendants to provide monetary redress to consumers or otherwise give up their ill-gotten gains.

As part of an ongoing effort to warn the public about the risks posed by scareware and other types of Internet fraud, the FTC has produced a new alert for consumers. To learn more, see the alert “‘Free Security Scan’ Could Cost Time and Money ” at http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt121.shtm.

The Commission vote authorizing the staff to file the complaint against the defendants was 4-0. The complaint was filed on December 2, 2008 in the U.S. District Court for the District of Maryland.

NOTE: The Commission authorizes the filing of a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. A complaint is not a finding or ruling that the defendants have actually violated the law.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.

12 December 2008

Don Sabelhaus joined ESC in 2002. His company, FamTec Software, produces budgeting and financial tracking software for families and individuals. Titles include Easy Expense Tracker and Family Job Jar. The website is famtecsoftware.com.

Masatsugu Sakurai joined ESC in 2003 as a Lifetime Member. (See the banners at www.edu-soft.org/content/index.php/banner-members). He was Member of the Month in September 2004. His company, Yoshimasa Electronic, develops acoustic measurement and analysis software. The business is located in Japan, but sells internationally via the Internet. The website is www.ymec.com.

Anthony Saliba joined ESC in 1993! Yes, that was before incorporation, when we were still meeting on a CompuServe forum. Anthony is now among the top ten most longstanding members. He was our very first Lifetime Member, and was Member of the Month in March 1999. His company, Nothing But Software, sells mostly software , as well as some of the equipment and gadgets that software users need. The website is www.nothingbutsoftware.com.

Kathy Salisbury joined ESC in 2001, and was Member of the Month in December of that year. She was elected to the Board of Directors in 2006, and is currently serving her second term as board Secretary. Her company, Great Mind Software, represents independent authors of software, books, and other media. The website is www.greatmindsoftware.com.

11 December 2008

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